Vulcan Gold, LLC v. Google, Inc., No. 07 C 3371, 2008 WL 2959951 (N.D. Ill. Jul. 31, 2008) (Manning, J.)
Judge Manning granted in part defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss, dismissing plaintiffs’ RICO claims. The Court previously dismissed plaintiffs’ complaint with leave to refile – click here to read the Blog’s post on that opinion. The Court held that plaintiffs did not sufficiently plead an enterprise. Plaintiffs only alleged that the defendants were contractually related within Google’s adsense program. And the alleged contractual relationship did not show consensual decisionmaking or joined purpose. Plaintiffs’ RICO claims were, therefore, dismissed.
The Court denied defendants’ motion to dismiss the unjust enrichment and civil conspiracy claims. Fed. R. Civ. P. 9(b) heightened pleading standards did not govern the claims because they were both based upon trademark infringement, not fraud.

Continue Reading No Heightened Pleading for Trademark-Based Unjust Enrichment Claim

Amari Co. v. Burgess, No. 07 C 1425, ___ F.Supp.2d ___, 2008 WL 656072 (N.D. Ill. May 7, 2008) (Ashman, Mag. J.).
Judge Ashman denied plaintiff Amari Co.’s motion for a protective order to prevent defendants’ alleged intimidation of Amari’s non-party witnesses in this Racketeering Influenced and Corrupt Organization Act (“RICO”). Amari argued, among other things,* that defendants were intimidating ex-employees of former defendant International Profits Associates (“IPA”), which was run by defendants, by threatening to enforce confidentiality agreements signed by all IPA employees.
The Court held that it could not grant Amari its requested relief for two reasons. First, to be effective the injunction would have had to enjoin non-party IPA from suing its ex-employees to enforce the agreements. The Court could not enjoin IPA without proof it was working in concert with defendants or that IPA was defendants’ alter ego. And before enjoining IPA, IPA would have to be given notice of the motion and an opportunity to respond.
Second, Amari sought a blanket injunction from enforcing the agreements against IPA’s ex-employees, but did not allege that the agreement was unenforceable. While confidentiality agreements cannot be used to hide a company’s potential impropriety, they can be used to protect proprietary information. Without identification of specific ex-employees allegedly threatened with a suit, the Court could not determine whether IPA might have been using the confidentiality agreement for enforceable or unenforceable ends. And if Amari identified a specific individual, it could subpoena them, removing the need for an injunction.
*Amari alleged other forms of intimidation, but they are not related to IP and are, therefore, not discussed in this post.

Continue Reading Threat to Enforce Confidentiality Provision Not Intimidation

Rosen v. Mystery Method, Inc., No. 07 C 5727, 2008 WL 723331 (N.D. Ill. Mar. 14, 2008) (Kocoras, J.).
Judge Kocoras granted defendants’ Fed. R. Civ. P. 9(b) & 12(b)(6) motion to dismiss plaintiff Rosen’s claims. Rosen, on behalf of himself and others similarly situated, alleged that defendant Mystery Method Corp. (“MMC”), in concert with various other business partners, violated the Racketeer Influenced and Corrupt Organizations Act (“RICO”) by continuing to market MMC’s Mystery Method dating products as endorsed or otherwise approved by the original creator of the Mystery Method, Erik Von Markovick (“EVM”). EVM created a “sophisticated system . . . to help men meet and attract women” known as the Mystery Method. EVM offered personal training in his methods and eventually partnered with MMC to administer the business of his related Mystery Method website. Eventually, EVM left MMC and started his own website When EVM left, MMC maintained control of the Mystery Method website.
The Court held that Rosen had not sufficiently pled the predicate act of copyright infringement.* Rosen only pled general allegations:
[T]he predicate acts alleged herein cluster around criminal copyright infringement, trafficking in certain goods bearing counterfeit marks, mail fraud and wire fraud . . . .”
The Court held that these general allegations did not meet the Fed. R. Civ. P. 9(b) heightened pleading requirements for fraud. Rosen did not allege:
That MMC owned a valid copyright for the products or services offered on its Mystery Method website;
That EVM owned a valid copyright covering products or services offered on the Mystery Method website; or
How MMC’s products and services were counterfeit
Furthermore, Rosen’s complaint suggested that MMC was permitted to continue using the Mystery Method name. Rosen alleged that MMC entered an agreement with EVM to develop products and services via the Mystery Method website. And Rosen alleged that MMC maintained control of the Mystery Method website after EVM left MMC.
* RICO requires that defendants have participated in at least two predicate acts. Copyright infringement was one of the predicate acts alleged by Rosen. The Court also dismissed on other RICO-specific grounds, but those will not be discussed here because they are not IP-specific.

Continue Reading Copyright Predicate Acts for RICO Claim are Subject to Rule 9(b) Hightened Pleading

Sotelo v. Suburban 171, Inc., No. 07 C 2447, 2007 WL 2570355 (N.D. Ill. Aug. 29, 2007) (Der-Yeghiayan, J.).
Judge Der-Yeghiayan denied defendants’ Fed. R. Civ. P. 12(b)(6) motion to dismiss plaintiffs’ Lanham Act unfair competition claim. Plaintiffs operated a salon called “Studio 171.” Defendants took over the location of plaintiffs’ salon and operated their own salon using all of the Studio 171 signage and marks. Defendants argued that plaintiffs’ unfair competition claim should be dismissed because the Studio 171 mark was either descriptive or generic and plaintiff did not plead secondary meaning. But the Court held that the argument was premature. A plaintiff need not plead secondary meaning.* And furthermore, plaintiffs did plead secondary meaning, stating that the Studio 171 mark had developed “considerable value” and become “uniquely associated” with plaintiffs’ business. The Court did, however, dismiss plaintiffs’ RICO claim for failing to plead their fraud allegations with particularity pursuant to Fed. R. Civ. P. 9(b).
* The Court did not cite the Supreme Court’s recent decision in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (2007) (read more about the decision at the University of Chicago Faculty Blog). But based on other recent opinions citing Twombly for heightened pleading requirements, I wonder if plaintiffs at least should plead secondary meaning now.

Continue Reading Plaintiff Not Required to Plead Trademark’s Secondary Meaning